SEBI Proposes Allowing OBPPs To Offer IFSCA-Regulated Products, Seeks Public Comments

The Securities and Exchange Board of India (SEBI) on Tuesday, 5 May, issued a consultation paper proposing to allow Online Bond Platform Providers (OBPPs) to offer products regulated by the International Financial Services Centres Authority (IFSCA), along with other changes aimed at improving ease of doing business.

SEBI stated that the proposals are intended to refine the existing regulatory framework governing OBPPs, which are currently regulated under the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. The regulator has invited public comments, noting that stakeholders have sought changes to improve operational flexibility and compliance efficiency.

The consultation paper outlines three key proposals.

First, SEBI proposes permitting OBPPs to offer securities or products regulated by the IFSCA, subject to compliance with applicable requirements under the Foreign Exchange Management Act and the Overseas Investment Rules.

Second, it proposes allowing OBPPs to facilitate investments in bonds issued under Section 54EC of the Income Tax Act, 1961 or Section 85 of the Income Tax Act, 2025. These offerings would require disclosures on key features such as lock-in period, investment limits, and tax implications.

Third, SEBI proposes reviewing the framework governing the appointment of compliance officers by OBPPs and aligning it with the norms applicable to stock brokers.

Public comments on the consultation paper may be submitted until 26 May 2026.